"BROTHERHOOD" LABOR UNITY MOVEMENT OF THE PHILIPPINES, ET AL.

,
petitioners, vs.
HON. RONALDO B. ZAMORA, PRESIDENTIAL ASSISTANT FOR LEGAL AFFAIRS, OFFICE
OF THE PRESIDENT, ET AL, respondents.
G.R. No. L-48645 January 7, 1987

GUTIERREZ, JR., J.:

PRINCIPLES

Labor Relations; Factors considered in determining employer employee relationship.—In

determining the existence of an employer employee relationship, the elements that are generally considered
are the following: (a) the selection and engagement of the employee; (b) the payment of wages; (Q) the
power of dismissal; and (d) the employer’s power to control the employee with respect to the means and
methods by which the work is to be accomplished. It is the socalled “control test” that is the most important
element.

Labor Relations; Criteria for determining existence of independent contractor

relationship.—The existence of an independent contractor relationship is generally estabished by the
following criteria: “whether or not the contractor is carrying on an independent business; the nature and
extent of the work; the skill required; the term and duration of the relationship; the right to assign the
performance of a specified piece of work; the control and supervision of the work to another; the employer’s
power with respect to the hiring, firing, and payment of the contractor’s workers; the control of the
premises; the duty to supply the premises tools, appliances, materials and laborer; and the mode, manner,
and terms of payment.

FACTS

1. The petitioners are workers who have been employed at the San Miguel Parola Glass Factory as
“pahinantes” or “kargadors” for almost seven years. They worked exclusively at the SMC plant, never
having been assigned to other companies or departments of San Miguel Corp, even when the volume of
work was at its minimum. Their work was neither regular nor continuous, depending on the volume of
bottles to be loaded and unloaded, as well as the business activity of the company.

2. However, work exceeded the eight-hour day and sometimes, necessitated work on Sundays and
holidays. -for this, they were neither paid overtime nor compensation.

3. Sometime in 1969, the workers organized and affiliated themselves with Brotherhood Labor Unity
Movement (BLUM). They wanted to be paid to overtime and holiday pay.

4. They pressed the SMC management to hear their grievances. BLUM filed a notice of strike with the
Bureau of Labor Relations in connection with the dismissal of some of its members.

5. San Miguel refused to bargain with the union alleging that the workers are not their employees but the
employees of an independent labor contracting firm, Guaranteed Labor Contractor.

6. The workers were then dismissed from their jobs and denied entrance to the glass factory despite their
regularly reporting for work. A complaint was filed for illegal dismissal and unfair labor practices.

ISSUE

Whether or not there was employer-employee relationship between the petitioner-workers of BLUM and
San Miguel Corp.
 RULING

Yes. In determining if there is an existence of the relationship, the four-fold test was used by the Supreme
Court which are a) the selection and engagement of the employee, b) Payment of wages c) Power of
dismissal, and d) Control Test where the employer’s power to control the employee with respect to the
means and methods by which work is to be accomplished.

In this case, the records fail to show that San Miguel entered into mere oral agreements of employment with
the workers. Considering the length of time that the petitioners have worked with the company, there is
justification to conclude that they were engaged to perform activities necessary in the usual business or
trade. Despite past shutdowns of the glass plant, the workers promptly returned to their jobs. The term of
the petitioner’s employment appears indefinite and the continuity and habituality of the petitioner’s work
bolsters the claim of an employee status.

As for the payment of the workers’ wages, the contention that the independent contractors were paid a lump
sum representing only the salaries the workers where entitled to have no merit. The amount paid by San
Miguel to the contracting firm is no business expense or capital outlay of the latter. What the contractor
receives is a percentage from the total earnings of all the workers plus an additional amount from the
earnings of each individual worker.

The power of dismissal by the employer was evident when the petitioners had already been refused entry to
the premises. It is apparent that the closure of the warehouse was a ploy to get rid of the petitioners, who
were then agitating the company for reforms and benefits.

The inter-office memoranda submitted in evidence prove the company’s control over the workers. That San
Miguel has the power to recommend penalties or dismissal is the strongest indication of the company’s
right of control over the workers as direct employer.